Image Source: Stocks had a massive pullback this week following the FOMC’s decision to cut rates by 25 basis points. The Dow Jones extended a 10-day losing streak, the longest since the 70s.Video Length: 00:40:46Key topics and questions David and I talked about include: 0:00 – Market recap 0:50 – Bitcoin: Where do I see the trend for Bitcoin going now that it has reached $108k? Being that it’s been over a decade since my last position, what indicators did I base my recent Bitcoin trade on? 11:50 – Stock market outlook: Is the sell-off after the Fed news earlier in the week just the tip of the iceberg? Or is the bull just trying to buck off the nervous investors before rocketing higher? 20:33 – Dow Jones’ losing streak: On a magnitude of time scale, what are my thoughts about the Dow’s longest losing streak since 1978? 22:48 – Energy stocks: Why am I bearish on energy stocks? The risk of holding dividend-paying stocks. 27:38 – 35%-55% pullback in S&P 500: What could a potential pullback in January look like? What assets could become safe havens? 30:20 – USD: How do I think the USD will perform in the coming year? Is there a downside to a high USD? 33:25 – Gold: Do I think gold will do well in 2025? 35:00 – CAD: What are my thoughts on the Canadian dollar? 37:33 – Peak maximum risk: Is there any sector that traders with more of an appetite for risk to look into?

Image Source:  The personal consumption expenditures (PCE) price index rose a less-than-expected 0.1% in November. Core inflation increased 2.8%, remaining above the Fed’s 2% goal. Stocks and bond yields showed positive reactions to the inflation data, but concerns still exist. The latest economic data reveals a welcome moderation in inflation, as the personal consumption expenditures (PCE) price index rose by a less-than-expected 0.1% in November.This figure, a notable decrease from October’s unrevised 0.2% gain, coupled with solid but somewhat disappointing consumer spending, has provided some relief to markets that have been grappling with the Federal Reserve’s recent “hawkish” rate cut.This report presents a complex picture for policymakers and investors alike, as they balance the need to control inflation with concerns about economic growth. Inflation eases, but remains above target  The Commerce Department’s report on Friday also showed that the PCE price index increased by 2.4% in the year through November, up from 2.3% in October.This slight rise in the annual inflation rate is partially attributed to lower readings from last year dropping out of the calculation.Excluding the volatile food and energy components, the PCE price index climbed by 0.1%, a decrease from October’s unrevised 0.3% gain.In the 12 months through November, core inflation increased by 2.8%, matching October’s figure.This mixed set of data highlights that while price pressures are easing, inflation remains above the Fed’s 2% target. Market reaction  According to a Reuters report, the market’s response to the inflation data was notable, as the S&P 500 pared some of […]

Photo by  on AI has the potential to generate enough wealth — right here in the United States — to mint 22,000 new millionaires every 30 days, from now until the end of the decade.22,000 millionaires a month … that’s more than enough to fill Madison Square Garden.I don’t make predictions, claims or forecasts. But I have research showing me where this is heading…In 2023, the AI industry’s revenue was $208 billion.By 2030, it’s projected to reach $1.85 trillion.That’s roughly a 9X increase in seven years:So, all the money we made in AI last year … all the huge stock run-ups … all the big returns … they are just a mere drop in the bucket of what’s coming… How We Got NVIDIA Early  Let me be clear … you are not too late.In fact, you are right there in the early innings.Because while everyone is focusing on the AI market of the past few years…In December 2020, I told my readers to “back up the truck” and buy.Since then, it’s up roughly 900%.The time to get into those stocks was three or four years ago.But business, like nature, is never static.Right now, every Big Tech company and their mother are nipping at their heels.They all want a piece of NVIDIA’s () 80% market share, and they are working like the devil to get it.My point is, most investors have their eyes fixed on the rearview mirror when the real opportunity is right in front of them.They are going to miss out […]

Image Source: The growth of the private credit market exploded after the global financial crisis of 2008-2009 as private credit rushed to fill the gap that the banking industry was no longer able to fill because of the distress of its balance sheets. Tightened capital standards made loans to middle-market companies unattractive for banks, shutting out most small- and middle-size companies from the bank market. In addition, the 2010 enactment of the  made it increasingly expensive for small banks to operate, cutting off their supply of loans to small and mid-size companies.Another reason for the explosive growth is that corporations have found benefits in private lending that are sufficient to offset their higher yields. Those benefits include: Speed of execution. No mandated public disclosure of proprietary information. Less ongoing disclosure requirements required for fundraising in the public market. Avoiding the time-consuming and expensive process of obtaining a rating from one or more of the rating agencies. The ability to customize the loan structure to meet the particular needs of the borrowing company, offering management greater flexibility. A borrower facing financial difficulties will find it is easier in a private debt transaction for management to do a workout with only one or a few lenders compared to a large number of lenders in a public bond offering. The growth rate of private credit has been so rapid (growing to nearly $ by the end of 2023, roughly ten times larger than it was in 2009), that concerns about there being a bubble have been […]

Image Source: That’s Heritage Foundation economist  yesterday. Dr. Antoni continues: Increasingly, people are realizing that the 2% target is long gone. We’re looking at 3% basically as the implicit target. Now we’re in for a lot of pain. So the question is just, is this going to be 1920 or is it going to be 1929 I wondered what the basis for this assertion was. As usual with Dr. Antoni, it’s hard for me to determine. Take a look at 3 year median expected CPI inflation of consumers.Figure 1: 3 year median expected CPI inflation deviation from 2.45% target (blue). NBER defined peak-to-trough recession dates shaded gray. Source: , NBER, and author’s calculations.Seems to me that the Fed’s coming close to re-establishing credibility, insofar as households are concerned.One can measure Fed credibility with respect to its inflation target in a variety of ways. I use plot three measures.Figure 2:  credibility measure using 2.45% target (blue), squared deviation of expectation from 2.45% target (green), 75th percentile deviation from 2.45% target (red). NBER defined peak-to-trough recession dates shaded gray. Source: , NBER, and author’s calculations.It’s true the folks at the 75th percentile remain skeptical — but no more so than at the end of the Trump 1.0 administration. The Bordo-Siklos measure seems almost dead on.Business Cycle Indicators For November 2024 Canada And Recession Business Cycle Indicators As Of Mid-December